As a first step, said the statement distributed by the Portuguese Securities Market Commission (CMVM), a forest base of around 40,000 hectares will be created, which will ensure the supply of a unit – yet to be built – for the production of eucalyptus wood chips to export about 1 million tons per year.

The group added that the results of this first phase, as well as the reassessment of market circumstances, “will be essential for Portucel Moçambique to validate the conditions needed to proceed with the large-scale forest plan for the second phase industrial project, which includes planting of an additional 120,000 hectares of forest and construction of a pulp mill with a production capacity of about 1.5 million tons per year.”

According to the Navigator group, the project will be greenlighted if work to ensure these conditions is successful, which is expected to be completed within the next six months. The group also said that in this first phase it estimates a total investment by Portucel Moçambique of about US$260 million, and almost half (US$120 million dollars) has already been invested so far.

This includes planting and supporting forestry development of some 40,000 hectares, construction of the chip factory and US$10 million in the social development programme and construction and improvement of rural infrastructure.

In 2009, Navigator set up Portucel Moçambique, a Mozambican company whose investment in an integrated project was estimated at US$2.3 billion, and the International Finance Corporation (IFC) of the World Bank Group acquired 20% of the project in December 2014.